Health Policy Report (8/16)

August 16, 2021

Capitol Hill Update

The Senate wrapped up its extended summer session last week after passing the bipartisan infrastructure deal and adopting the Democratic budget resolution for fiscal year (FY) 2022. Both measures now head to the House, where lawmakers will return during the week of August 23 to get a head start on its jam-packed legislative agenda for the fall. Majority Leader Steny Hoyer (D-MD) noted in a “Dear Colleague” letter that Members will take up the $3.5 trillion budget framework and formally trigger the reconciliation process, as well as legislation pertaining to voting rights.

While Leader Hoyer was originally noncommittal on taking up the Biden-endorsed infrastructure deal during this abbreviated session — much to the chagrin of centrists who have pressed for a vote on the Senate’s legislation as soon as possible — Speaker Nancy Pelosi (D-CA) instructed the House Rules Committee to explore the possibility of crafting a rule that would advance both the budget resolution and infrastructure deal. However, the Speaker’s office also reiterated that a vote to trigger budget reconciliation for FY 2022 will come before any action on the bipartisan infrastructure deal. This upcoming House session will be an important litmus test for Democratic leadership as they look to coalesce moderates’ and progressives’ competing priorities on the fall agenda.

Biden Calls on Congress to Lower Drug Prices

On Thursday, the Biden administration published a fact sheet outlining the president’s policy agenda to reduce drug prices, including: 

  • Allowing Medicare to negotiate drug prices directly; 
  • Requiring manufacturers to pay rebates when the price of a drug increases faster than inflation; 
  • Capping out-of-pocket costs for Medicare beneficiaries; 
  • Importing lower-cost prescription drugs from Canada; and 
  • Accelerating the development and uptake of generic and biosimilar drugs. 

Around noon on Thursday, President Biden delivered remarks on his plan. He noted that patent issues can often lead to high prices and called on the Food and Drug Administration (FDA) to expedite generic drug approvals. He also supported drug importation from Canada, citing Colorado’s importation policy. The president discussed current Congressional efforts to allow Medicare drug price negotiation for the nation’s most expensive drugs, though he characterized the policy as a “narrow vision,” and he instead endorsed his campaign proposal that would allow negotiation for all drugs. Additionally, he said that a pricing threshold of “what the market will bear” is insufficient, noting that such a mechanism would still leave many Americans unable to afford medications.

He elaborated that negotiations for fair base prices should reflect research and development (R&D) funding, allowances for pharmaceutical companies to maintain a “significant profit,” and beneficiary affordability. After consideration of these factors, if fair prices are still unaffordable, the president said that Congress and the administration will have to discern what “society” can provide. Price increases would be justified by changes in R&D, “healthy profit” for companies, and inflation.

President Biden then turned his focus to seniors, outlining his policy to limit their out-of-pocket (OOP) spending caps to $3,000 per year. He outlined the administration’s focus on the development of Advanced Research Projects Agency for Health (ARPA-H), the Affordable Care Act (ACA) special enrollment period, 40 percent lower premiums (from about $104 per month to $62 per month), and Medicare expansion to include dental, vision, and hearing. President Biden closed his remarks by calling on Congress to work in a bipartisan fashion to lower drug prices and support his Build Back Better plan.

Democrats Announce Fiscal Year 2022 Budget Resolution

Earlier this week, Senate Democratic leadership released a memo (TRP analysis) including details of the Senate budget resolution for fiscal year (FY) 2022. The resolution calls for a series of policy proposals pertaining to health care, including: (1) extending the American Rescue Plan’s expansion of the Affordable Care Act; (2) addressing the Medicaid coverage gap; (3) expanding Medicare to include dental, vision, and hearing benefits; (4) lowering the Medicare eligibility age; (5) addressing health care provider shortages through Graduate Medical Education; (6) funding to support access to primary care; (7) boosting home- and community-based services for seniors and people with disabilities; (8) investing in new maternal, behavioral, and racial justice health equity initiatives; (9) funding for future pandemic preparedness efforts; (10) health-related funding offsets, including prescription drug pricing reform; and (11) a federal paid family and medical leave benefit. 

Policy guidelines accompanying the budget resolution are neither final nor exclusive. Moving forward, Congressional committees are tasked with harmonizing the new spending with new revenues and savings to correspond with a budget target — with this, the cost of these health care proposals have the potential to be scaled up or down to work within available revenues. Democrats aim to pass the $3.5 trillion package via reconciliation, a powerful procedural tool that allows budget bills to move through the Senate via a simple majority and avoid a legislative filibuster. Democrats did not include instructions pertaining to the federal debt ceiling, punting this issue to Congress’ appropriations process for FY 2022 instead. 

Democrats Push for Pandemic Preparedness Funding in $3.5T Infrastructure Package

As Congress whittles down their $3.5 trillion reconciliation package, 20 Democrats are pushing for leadership to fully fund pandemic preparedness efforts. Rep. Ritchie Torres (D-NY) led a letter to House and Senate leadership calling for at least $30 billion for future pandemics. While President Biden initially proposed a $30 billion budget for such efforts, Democrats are considering slashing the number to $5 billion in an attempt to fit all their priorities in under the $3.5 billion threshold. Along with signatures from members including Sens. Elizabeth Warren (D-MA), Ron Wyden (D-OR), and Maggie Hassan (D-NH), the letter draws attention to racial health disparities and the economic impact of future pandemics.

While the Senate passed the infrastructure bill last Wednesday, further negotiations are underway in the House. This letter may indicate that the bill will still change significantly before it ever reaches the president’s desk. Rep. Torres held a press conference to promote the inclusion of more pandemic preparedness funding, noting that it could be used for preemptive vaccine development, training health personnel, and supplying the strategic national stockpile (SNS). Public health officials join Rep. Torres’ sense of urgency to boost pandemic spending, though it appears that neither the White House nor the majority of Congress is pushing for any changes that could put the package’s success at risk. Over the past month, advocates were hopeful that Sen. Patty Murray (D-WA) would continue to push for the full $30 billion. A few weeks ago, she published a piece calling for the full $30 billion, though she did not sign onto Rep. Torres’ letter last week.

Wyden, Casey Release Sweeping Nursing Home Legislation

On Tuesday, Senate Finance Committee Chair Ron Wyden (D-OR) and Senate Aging Committee Chair Bob Casey (D-PA) introduced a bill to improve nursing home care (S. 2694; press release; summary; section-by-section). The legislation was triggered by dangerous conditions in long-term care (LTC) facilities amidst the pandemic. According to federal data, nursing homes accounted for about 22 percent of COVID-19 deaths, despite consisting of only one prevent of the U.S. population. The legislation would impose several requirements on the Department of Health and Human services and skilled nursing facilities (SNFs) to improve transparency, accountability, and quality by making improvements to data collection and the nursing home survey and oversight process. It also would make several investments to address staffing in nursing facilities, including a temporary increase in Medicaid funding to I increase wages. Additionally, the bill would impose certain staffing and infection control requirements.

Additionally, the legislation would expand assistance for struggling nursing homes. Specifically, the Special Focus Facility (SFF) initiative would receive $14.8 million to address deficiencies. Other provisions include requirements that infection prevention specialists be available 24 hours a day, new Centers for Medicare and Medicaid Services (CMS) payment demonstrations, and a ban on pre-dispute arbitration agreements. Regarding oversight of facilities, the legislation requires more audits of facilities and vendors. The Congressional Budget Office (CBO) has yet to release an estimated price for the bill, though it is expected to cost tens of billions of dollars.

A similar bill is projected to be introduced by House Ways and Means Committee Chair Richard Neal (D-MA) and House Energy and Commerce Chair Frank Pallone (D-NJ). While the lawmakers sit atop powerful committees, the legislation is both partisan and expensive, limiting its chances of passage. Sens. Wyden and Casey, along with Rep. Neal, also recently introduced S. 2674 to reauthorize funding for programs to prevent, investigate, and prosecute elder abuse, neglect, and exploitation, and for other purposes. Simultaneously, President Biden is looking to expand home- and community-based services to the tune of $400 billion in the bipartisan infrastructure package.

White House Enlists Private Sector to Boost Vaccine Rates

On Wednesday, President Biden met with chief executives of United Airlines, Kaiser Permanente, and Howard University to discuss vaccination requirements. These groups, representing private education, big business, and health care providers, are requiring vaccinations for their staff. Howard is also requiring vaccines for its students. Two weeks ago, the White House required that federal workers get vaccinated, and they consulted the Chamber of Commerce, National Association of Manufacturers, and Business Roundtable to promote uptake amongst small businesses. The Department of Treasury then held a call with about 900 employers last week to discuss how businesses can spend their COVID-19 funding from relief packages. Additionally, the White House COVID Response Coordinator, Jeffery Zients, is working on vaccine incentives, including benefits from Lyft, Uber, and childcare service providers, as well as vaccine filters from Yelp.

Amidst the race against the Delta variant, businesses are answering the call to encourage vaccinations. Tyson Foods, Amtrak, and over 1,000 hospitals are requiring that their workers be vaccinated, while over 600 higher education institutions are requiring that both staff and students receive vaccinations. Guidance from the Equal Employment Opportunity Commission gave a green light to vaccine mandates, offering legal standing for states and localities, including Washington, DC, New York City, and California, to issues vaccine requirements. While some companies are hesitant to require vaccinations, the Biden administration is working to remove the political connotation from such requirements.

Chamber Sues HHS Over Price Transparency Requirements

This past Tuesday, the U.S. Chamber of Commerce and the Tyler Area Chamber of Commerce in Texas filed a suit against the Department of Health and Human Services (HHS) in a federal district court in Texas. The U.S. Chamber asserted that HHS’s transparency rule would compel the disclosure of confidential information, and the local Texas Chamber argued that the rule violates the Administrative Procedure Act. The transparency rule obliges insurers to digitally disclose certain pricing data, including drug pricing, starting in 2022. It also mandates insurers to publicize information on cost-sharing and price negotiation to consumers starting in 2023, though the Chamber is concerned with the regulation calling for machine-readable delivery of information. Specifically, the rule requires three separate files to be available for the public: (1) one file to show negotiated rates; (2) another to illustrate historical payments involving out-of-network providers; and (3) one to display negotiated rates and historical payments for covered prescription drugs.

The Chamber is concerned with disclosing trade secrets and other commercially sensitive information that they believe will reduce competition and raise prices for consumers. They argue that the administration lacks authority to necessitate machine-readable disclosures. The statute cited in the rule requires information be presented in “plain language,” though the Chamber notes that requiring data be viewed only on a computer is not compliant with such a statute. Additionally, the final rule mandates “historical net prices,” which were not in the proposed rule. The Chamber asserts that since this element was not included in the proposal for the rule, entities did not have an opportunity to comment on this aspect of the policy. The Chamber argues that the policy is burdensome, cumbersome, and ineffective at promoting transparency.